Page 99 - The UnCaptive Agent

72 THE UNCAPTIVE AGENT

of commission income this is a cumulative ten-year
increase or decrease of $360,000. Agents often tell me
that achieving a ninety-five percent retention rate is
impossible. In fact, it is very possible and fairly common
among well run agencies. As I mentioned, my agency’s
retention rate has been over ninety-five percent for
almost every year we’ve been in existence. (We joke that
we’re a bit like the Hotel California in that regard.) We
have accomplished this using the strategies I’ve outlined
here. Having a great retention plan pays enormous
dividends in income and agency value.
Clearly, retention is a huge income and agency value
issue and deserves a great deal of focus, yet the study
indicates that small agencies place a significantly smaller
importance on retention than do medium to large agen-
cies. You’ve probably heard the old saying that you
should dress for the job you want, rather than the job
you have. This seems to me to be a bit like that. You
should plan to operate your business for the business
you want it to become, not the business it is. If larger
agencies put that much higher a focus on retention than
smaller agencies, perhaps you should, too.
I remember the first summer I was in the business.
After a grueling sixty-day period in which I wrote
about seventy-five workers’ compensation accounts, I
was exhausted. My partner encouraged me by telling
me that I’d have those accounts for a long time if I took
good care of them. And he was right! Twenty-five years
later, I still enjoy talking with—and renewing—many
of those original clients. Years later, Marsh Berry (the
leading investment banking and consulting firm in our
industry) performed an agency valuation study for us.
In the pro forma they prepared, they used ninety per-
cent as the retention factor. After making them look
more carefully at a lot of client lists, they were finally